The game is progressing fine. There's one newer version out there that you can find here: [link] It got some of the gameplay issues fixed, and a few more weapons. although it is not representativ for the new version that is underway.

I think it's biggest problem is that there is too much motion going on. Split into 3 separate animations with more subtle alternates, layered to create a single unit would create a very alive-feeling alien-thing.